Toronto, Ontario, January 15, 2025
PRESENT: Associate Judge Trent Horne
BETWEEN:
7299362 CANADA INC. C.O.B. AS ALEXA TRANSLATIONS
Plaintiff / Defendant by Counterclaim
and
AMAZON.COM, INC., AMAZON TECHNOLOGIES, INC., AMZN MOBILE LLC, AMAZON.COM SERVICES LLC, AND AMAZON.COM.CA, INC.
Defendants / Plaintiffs by Counterclaim
ORDER AND REASONS
I. Overview
[1] This is a motion to amend the statement of claim in an action for trademark infringement.
[2] The plaintiff (“Alexa Translations”) is in the business of providing professional translation and language interpretation services. It is the owner of the registered trademark ALEXA TRANSLATIONS, as well as the unregistered trademarks ALEXA TRASLATIONS AI and ALEXA TRANSLATIONS & Design.
[3] The defendants (collectively “Amazon”) offer products and services through an on-line store in more than 100 countries.
[4] Amazon claims that it has used ALEXA as a trademark since about 1999 when it acquired Alexa Internet Corporation. By 2014, Amazon developed virtual assistant technology, branded as the Alexa Virtual Assistant. The Alexa Virtual Assistant has many skills and capabilities, including translation.
[5] Alexa Translations alleges that Amazon’s use of ALEXA, particularly in association with translation services, infringes its rights under sections 7(b), 19, 20, and 22 of the Trademarks Act, RSC 1985, c T-13 (“TMA”). Amazon denies infringement, and asserts by way of counterclaim that the ALEXA TRANSLATIONS registration is invalid.
[6] The parties have exchanged documents, conducted a round of examinations for discovery, and argued motions to compel. A schedule has been set for remaining pre-trial steps.
[7] Alexa Translations has brought a motion to substantially amend the statement of claim. Some of the amendments were consented to. The non-contentious amendments do not need to be discussed, and are reflected in the order below.
[8] As for the contested amendments, there are two principal issues: i) the addition of new Amazon companies as defendants, together with allegations of infringement of an additional trademark, AMAZON TRANSLATE; and ii) a new claim for punitive damages.
[9] The proposed addition of new defendants is refused because, if granted at this stage of the action, would result in prejudice that cannot be compensated in costs. Further, the addition of the new Amazon companies is not necessary for the effective and complete determination of the issues raised in the statement of claim as initially served and filed. The amendments as they relate to punitive damages are allowed. Even though they may be difficult to establish, they are not doomed to fail.
II. Amendments – Legal Principles
[10] The principles of amendments to pleadings was recently canvassed by Justice McHaffie in GE Renewable Energy Canada Inc v Canmec Industrial Inc, 2024 FC 187:
The general rule is that an amendment should be allowed at any stage of an action for the purpose of determining the “real questions in controversy,” provided that allowing the amendments (i) would not result in an injustice to other parties not capable of being compensated by an award of costs; and (ii) would serve the interests of justice. The onus lies on the amending party to show the amendments should be allowed.
In assessing whether an amendment would serve the interests of justice, the Court may consider factors such as (i) the timeliness of the motion to amend; (ii) whether the proposed amendments would delay trial; (iii) whether the amending party’s prior position has led another party to follow a course of action in the litigation that it would be difficult to alter; and (iv) whether the amendments will facilitate the Court’s consideration of the substance of the dispute on its merits. These factors are considered together without any single factor being determinative.
An amendment must also yield a sustainable pleading, and an amendment that is liable to be struck out under Rule 221 should not be permitted. Thus, where it is plain and obvious that proposed amendments do not disclose a reasonable cause of action, or the amendments represent a “radical departure” from the party’s prior positions, they should not be permitted. This has been described as a “threshold issue,” to be addressed before turning to other questions of justice and injustice.
Pleadings that are inadequately particularized to allow the opposing party to plead in response are also subject to being struck under Rule 221 for failure to comply with the requirement in Rule 174 that they contain “a concise statement of the material facts on which the party relies. Amendments may similarly be refused on this ground, whether considered as a threshold issue or as a matter of the interests of justice. However, where appropriate, a lack of particulars in a proposed amendment may be addressed by granting leave to reapply or by imposing an obligation of particulars as a condition of the amendment.
[Citations omitted.]
III. Proposed addition of AWS
A. Nature of the Proposed Amendments
[11] A significant portion of the proposed amendments is to add two new defendants, Amazon Web Services, Inc and Amazon Web Services Canada, Inc (“AWS”
). The prayer for relief is proposed to be amended to include an injunction restraining the use of the trademark AMAZON TRANSLATE.
[12] Under the heading Amazon’s Translation Services, the statement of claim (“Claim”) makes a single passing reference to a cloud computing platform called Amazon Web Services:
- Since at least 2020, Amazon has performed language translation and/or language interpretation services in Canada, including:
(b) text translation services consisting of a computer program marketed by Amazon as “Amazon Translate”, which uses machine learning technology to translate text in documents and is offered by Amazon, for a fee, to companies using Amazon’s comprehensive cloud computing platform, Amazon Web Services (“AWS”).
[13] The Claim does not make reference to any particular Amazon Web Services entity, nor is there any assertion that the AMAZON TRANSLATE trademark itself is confusing with the plaintiff’s ALEXA trademarks, or constitutes any form of infringement, passing off, depreciation of goodwill or any other misconduct of any kind. The definition of “Infringing Activities” in paragraph 25 of the Claim makes no reference to Amazon Web Services or AMAZON TRANSLATE.
[14] In the proposed amended statement of claim (“Proposed Claim”), Alexa Translations intends to allege that AWS has offered cloud computing services, predominantly to businesses, in association with trademarks including AWS & Design, AMAZON WEB SERVICES, POWERED BY AWS & Design, and AMAZON TRANSLATE. These are defined in the Proposed Claim as the “AWS Trademarks.”
[15] Even though the AWS Trademarks do not include ALEXA, Alexa Translations wants to assert that there are common elements in the AWS Trademarks that are used across Amazon’s trademark portfolio, such as the curved arrow shaped as a smile, and the name AMAZON. Alexa Translations intends to assert that the AWS Trademarks are strongly evocative of the Amazon ALEXA trademarks given their shared use of the smile design and the Amazon name, and therefore are closely associated with Amazon in the minds of a segment of the Canadian public, having regard to their appearance, sound, and idea.
[16] Alexa Translations argues that the use of the AWS Trademarks by AWS is a relevant surrounding circumstance that can be considered as part of the confusion analysis under subsection 6(5) of the TMA.
[17] Alexa Translations relies on Marlboro Canada Limited v Philip Morris Products SA, 2012 FCA 201. The facts of that case are unique. For complex reasons, Philip Morris owned certain Canadian trademarks relating to Marlboro cigarettes, but did not own the registration for the word MARLBORO; that registration was owned by Imperial Tobacco. Philip Morris sold cigarettes in Canada with a red “rooftop” design, but not the word MARLBORO. Imperial Tobacco was ultimately successful in its claims that the use of the rooftop design by Philip Morris infringed the MARLBORO trademark (see paras 62-85 for the infringement analysis). Alexa Translations argues that this is an example where a likelihood of confusion is superficially implausible given the differences between the trademarks, but the Court can still conclude that consumers are likely to be confused as a consequence of how they associate the trademarks. Alexa Translations argues that this litigation would not be before the Court without Amazon’s use of ALEXA, but because translation services are also offered in association with AMAZON TRANSLATE, that the Amazon companies act in concert, and that consumers associate Amazon’s various trademarks, then the pleading as against AWS relating to its use of AMAZON TRANSLATE discloses a reasonable cause of action.
[18] The proposed amendments as they relate to AWS do not refine an existing pleading. These amendments seek to add new defendants, new trademarks, and a new theory of infringement. Even if I was to assume that the proposed amendments disclose a reasonable cause of action against AWS, permitting the amendments at this stage would prejudice AWS in a manner that cannot be compensated in costs. The motion as it relates to AWS and AMAZON TRANSLATE is therefore dismissed.
B. Trial Dates
[19] In the ordinary course, trial dates are fixed “as soon as practicable” after a pre-trial conference (Rule 264 of the Federal Court Rules, SOR/96-106 (“Rules”)). Parties may, however, make a request at any time that trial dates be fixed.
[20] Shortly after the release of the decision on the defendants’ bifurcation motion in May 2024, Alexa Translations wrote to the Court and requested that a trial be scheduled in November or December 2025. Amazon consented to this request.
[21] Once trial dates are fixed, adjournments are only granted when exceptional and unforeseen circumstances can be demonstrated. The Federal Court operates on a guaranteed, fixed-date system, meaning that when the Court has fixed a date for a hearing, parties are expected to proceed on that date (see the Court’s Amended Consolidated General Practice Guidelines, amended December 20, 2023 and Rovi Guides, Inc v Videotron GP, 2019 FC 1220 at para 54).
[22] During a case management conference on May 27, 2024, the risks of setting trial dates early in the proceeding were discussed. The parties were cautioned that typical delays in litigation (eg a discovery witness that must be substituted because they left the company; Rule 51 appeals; illness of an expert witness that delays delivery of a report) were unlikely to constitute exceptional circumstances. Alexa Translations wanted an early trial, accepted those risks, and agreed to trial dates in late 2025.
[23] I issued an order on May 28, 2024 that “set aside” December 1-19, 2025 for the trial of this action. Trial dates were set aside, as opposed to “fixed,” because a party is precluded from moving for summary judgment or summary trial once the time and place for trial have been fixed (Rule 213). While Alexa Translations was willing to forego the opportunity to move for summary judgment or summary trial to get trial dates, I was unwilling to compel Amazon to do the same. Amazon was given a date by which it was required to advise Alexa Translations and the Court whether a motion for summary judgment or summary trial would be brought. Unless notice was provided by that date, the trial dates would be fixed. While this left the door open for Amazon to move for summary judgment or summary trial, it made no difference for the Court’s administration. When the December 2025 dates were set aside, a judge was assigned, and those dates blocked off in their calendar. From the perspective of the Court, whether trial dates are set aside or fixed is a distinction without a difference.
[24] The May 28, 2024 order also set a schedule for the significant steps leading up to trial. Final motions to compel will be heard on May 9, 2025. Expert reports in chief are due on June 13, 2025.
[25] Alexa Translations is not asking for an adjournment of the trial, and submits that AWS can complete all pre-trial steps in time for a December 2025 trial. I cannot agree.
[26] Even if Alexa Translations’ motion had been granted from the bench at the conclusion of the hearing on December 5, 2024, AWS’ defence would have been due on January 22, 2025, taking into account the seasonal recess. Even if the plaintiff was to serve and file a reply in advance of the deadline, and AWS did not advance a counterclaim, AWS’ affidavit of documents would not be due until the end of February 2025. On the current schedule, that would give AWS fewer than four months to conduct discoveries, answer undertakings, argue discovery motions, and prepare expert reports in a proceeding that has not been bifurcated. Even if the deadline for expert reports was extended, and there is limited opportunity to do so in light of the December 2025 trial, expecting AWS to litigate on such a timetable is unreasonable, unfair, and prejudicial. This prejudice cannot be compensated in costs. Money cannot buy time.
[27] While Alexa Translations argues that this motion was brought in a timely way, I am not satisfied that it has been demonstrated that it could not have been brought earlier.
[28] I acknowledge that if Amazon elects to move for summary judgment or summary trial the trial dates will almost certainly be lost. This, however, does not open the door to Alexa Translations to compel AWS to litigate on an impractical timetable, or hope that the trial will later be delayed as a consequence of adding AWS as parties. There is no unfairness in holding Alexa Translations to its bargain. It wanted an early trial, got an early trial, and is now bound by that choice.
C. Joinder is not necessary
[29] Rule 104 provides that the Court may, at any time, order that a person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all matters in dispute in the proceeding may be effectually and completely determined be added as a party.
[30] An order to add a party under Rule 104 is discretionary. The exercise of discretion is guided by one test alone: necessity (Air Canada v Thibodeau, 2012 FCA 14 at paras 10-11).
[31] The parties disagree as to when necessity is assessed.
[32] I agree with AWS that the necessity test is based on the issues raised in the existing pleading, not the proposed amended pleading. The language of the Rule refers to “all matters in dispute”
– suggesting that necessity is assessed on the matters as framed in the existing pleading.
[33] If necessity for the purposes of Rule 104 was determined on the basis of proposed amendments, not the existing pleading, Rule 104 would have no purpose. If necessity was assessed with reference to the proposed amended pleading, the Court would only have to consider the principles under Rule 75, and whether the new proposed amendments disclose a cause of action with a reasonable chance of success against the proposed new parties, avoid prejudice and are in the interests of justice. If so, the new proposed parties would inevitably have to be found as “necessary,” and Rule 104 would be redundant.
[34] The allegations of infringement in respect of AMAZON TRANSLATIONS is a new cause of action against new defendants based on a new theory of infringement. I am not satisfied that the presence of AWS is necessary to determine the allegations of infringement that are currently pleaded in the Claim.
IV. Punitive Damages
[35] Another of the proposed amendments is to add a claim for punitive damages.
[36] In general terms, the material facts supporting the claim for punitive damages are that Amazon has known that its ALEXA and AMAZON TRANSLATE trademarks are confusingly similar with Alexa Translations’ trademarks because of office actions issued by the Canadian Intellectual Property Office (“CIPO”). It is asserted that CIPO issued office actions against certain of Amazon’s ALEXA trademark applications on the basis that they were considered to be confusingly similar with ALEXA TRANSLATIONS. Alexa Translations asserts that Amazon persisted in its knowing infringement for years, and commenced “section 45” summary cancellation proceedings against the ALEXA TRANSLATIONS registration. It is also alleged that Amazon narrowed the description of goods and services in a pending trademark application to remove services relating to “language,” and that this constitutes an admission that Amazon’s ALEXA is confusingly similar to ALEXA TRANSLATIONS.
[37] Punitive damages are exceptional, but may be awarded when a party’s conduct has been “malicious, oppressive and high-handed” such that it “represents a marked departure from ordinary standards of decent behaviour” (Whiten v Pilot Insurance, 2002 SCC 18 at para 36).
[38] Punitive damages are not routinely granted in intellectual property cases. Knowing or intentional infringement, without more, does not give rise to punitive damages (Dimplex North America Ltd v CFM Corp, 2006 FC 586 at para 123; Wi-Lan Technologies Corp v D-Link Systems Inc, 2006 FC 1484 at para 8). Ignoring a demand letter is insufficient for punitive damages (Gary Gurmukh Sales Ltd v Quality Goods Imd Inc, 2014 FC 437 at paras 119 and 132).
[39] It may be difficult to establish entitlement to punitive damages on the facts as alleged in the Proposed Claim. An office action is an interim step in the prosecution of a trademark application. An examiner may raise obstacles to registration, but this is a preliminary view that may be reversed upon receipt of submissions from the applicant. An office action is not a final determination of a likelihood of confusion, is not a refusal of the application under section 37 of the TMA, and is not a decision of the Registrar that is subject to appeal under section 56 of the TMA.
[40] There are a number of reasons why trademark applicants revise the list of goods and services in response to an office action, including simple expediency. I have difficulty accepting that an amendment to the list of goods and services after receipt of an office action constitutes an admission, ie, that Amazon’s trademark agent agreed that the views expressed in the office action as to a likelihood of confusion were true, that Amazon had done something wrong, or that the examiner was correct (see the definition of “admission” in Bryan A. Garner (ed.), Black’s Law Dictionary (12th ed), (St Paul: Thomson Reuters, 2024), p 57.
[41] That said, the issue before me is not whether Alexa Translations is likely to prevail on its claim for punitive damages, rather whether the proposed amendments in this respect would survive a motion to strike.
[42] The circumstances in which punitive damages will be awarded is not a closed list. Recently, in Armour Transport Inc v 2098763 Alberta Ltd (Armour Trucking of Edmonton), 2024 FC 2017, Justice Fuhrer concluded that the defendants’ conduct was not high‑handed, malicious, arbitrary or highly reprehensible, but was satisfied that punitive damages should be awarded because the amount of compensatory damages awarded represented little more than a licence fee (para 88).
[43] The Proposed Claim pleads that compensatory damages would amount to no more than setting a license fee payable by Amazon to profit from its disregard of Alexa Translations’ trademark rights.
[44] In light of the relatively low bar on a motion to amend, and in the absence of prejudice that cannot be compensated by an award of costs, I am not satisfied that Alexa Translations’ proposed amendments as they relate to punitive damages are doomed to fail. Put another way, I am not satisfied that it would be appropriate to deny the plaintiff, who is raising factual allegations that could potentially (but not necessarily) be found to justify an award of punitive damages, the opportunity to persuade the trial judge (Bauer Hockey Corp v Sport Maska Inc (Reebok-CCM Hockey), 2014 FCA 158 at para 35).
V. Particularization of Remedies
[45] Paragraphs 46 and 47 of the Proposed Claim read as follows:
- As a result of the foregoing and of the grievous harm to, and loss of control over, its goodwill, Alexa Translations is entitled to damages and compensation from Amazon, including without limitation by way of (i) a reasonable royalty based on Amazon’s sale and licensing of Alexa Enabled Devices, and on the revenue generated by Amazon (including AWS) related to translation services; (ii) nominal damages based on the number of Amazon Infringing Acts, and in respect of (iii) damages relating to the marketing and branding costs that Alexa Translations has incurred and continues to incur to address the depreciation of the goodwill associated with the Alexa Translations Trademarks.
- In the alternative, Alexa Translations is entitled to an accounting of Amazon’s profits from its trademark infringement, including in respect of (i) the benefit Amazon has received from infringing, rather than licensing, the Alexa Translations Trademarks, (ii) any Amazon Alexa subscription revenues, and (iii) AWS’ profits from offering and performing the Amazon Translate Services. It is appropriate that Amazon account for the benefits it has unjustifiably received, the disgorgement of which is necessary to deter Amazon’s Infringing Activities.
[46] It is fundamental to the trial process that a plaintiff plead material facts in sufficient detail to support the claim and relief sought. A plaintiff must plead, in summary form but with sufficient detail, the constituent elements of each cause of action or legal ground raised. The pleading must tell the defendant who, when, where, how and what gave rise to its liability Mancuso v Canada (National Health and Welfare), 2015 FCA 227 at paras 16-19). Paragraphs 46 and 47 of the Proposed Claim fail to meet this standard.
[47] These proposed paragraphs claim an entitlement to recovery from “Amazon,” which is defined in paragraph 14 of the Claim to refer to “a corporate family consisting of multiple tiers of affiliated and subsidiary companies, which include[s]” defendants other than Amazon.com, Inc. It is not apparent which defendant, or other Amazon companies which have not been named as defendants, are implicated in these paragraphs.
[48] The heads of damages proposed in the amendment are “without limitation.” As I said in Samsung Bioepis Co, Ltd v Janssen Biotech, Inc, 2024 FC 1715 at para 27, words like “including without limitation” are magnets for a demand for particulars. The use of “including” implies that there may be other grounds for the claimed entitlement to damages. If other grounds are contemplated, Amazon is entitled to know what they are (see also International Water-Guard Industries Inc v Bombardier Inc, 2007 FC 285 at para 13).
[49] Paragraph 46 claims damages and compensation. It is not apparent or particularized how “compensation” is separate and distinct from damages. Similarly, is not apparent in paragraph 47 what is meant by “benefits.”
[50] It is not apparent how nominal damages could be awarded in addition to other forms of damage, and not as an alternative to compensatory damages calculated by other means. The jurisprudence guides that where actual damages are difficult to establish, nominal damages may be the appropriate approach to damages (Dermaspark Products Inc v Patel, 2023 FC 388 at para 137). I am not aware of any authority that supports nominal damages being awarded in combination with other forms of compensatory damages.
[51] As for the proposed claim for marketing and branding costs in paragraph 46(iii), there are no material facts to support this claim. There is no suggestion in the Proposed Claim that Alexa Translations has rebranded or changed its marketing approach in response to Amazon’s activities, or that it is in the process of doing so.
[52] I agree with Amazon that the claim based on subscription revenues (which is also referenced at paragraph 19 of the Proposed Claim) is speculative.
[53] In light of these numerous deficiencies, the proposed amendments in paragraphs 46 and 47 cannot be allowed.
[54] Finally, the proposed amendment to paragraph 55 of the Proposed Claim was not the subject of argument, but seems to correct a typo in the use of a defined term. This amendment is allowed.
VI. Costs
[55] At the conclusion of the hearing, the existing parties advised that they had reached an agreement on quantum of costs – $2,000.00. In light of the divided success as between Alexa Translations and Amazon, costs will be fixed in that amount, payable in the cause.
[56] As for Amazon Web Services, Inc and Amazon Web Services Canada, Inc, those entities agreed to the same quantum. Since those entities were entirely successful, and will have no further involvement in the proceeding, costs are fixed at $2,000.00, payable forthwith.
ORDER in T‑1188‑23
THIS COURT ORDERS that:
The plaintiff is granted leave to serve and file an amended statement of claim that removes Amazon.com.ca, Inc. as a defendant and adds Amazon.com.ca ULC as a defendant, together with a reference to Amazon.com.ca ULC and particulars of its incorporation at paragraph 4.
The plaintiff is granted leave to serve and file an amended statement of claim with the following amendments, as set out in the draft amended statement of claim attached as a schedule to the notice of motion dated November 8, 2024:
a)paragraph 9 on page 9;
b)paragraph 11 on page 9;
c)paragraph 15 on page 10;
d)paragraph 20 on page 11;
e)paragraph 30(a)(i) on page 14;
f)paragraph 30(a)(ii) on page 14;
g)paragraph 30(a)(iii) on page 14;
h)paragraph 45 on page 20;
i)paragraphs 1(e) and 48-53, with the exception of any reference to or reliance on the AMAZON TRANSLATE trademark; and
j)paragraph 55.
The plaintiff’s motion is otherwise dismissed.
An amended statement of claim shall be served and filed within 15 days of the date of this order.
Costs of the motion as between the plaintiff and defendants are fixed at $2,000.00, payable in the cause.
The plaintiff shall pay costs to Amazon Web Services, Inc and Amazon Web Services Canada, Inc, fixed at $2,000.00, payable forthwith.
blank
“Trent Horne”
blank
Associate Judge
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET:
T-1188-23
STYLE OF CAUSE:
7299362 CANADA INC. C.O.B. AS ALEXA TRANSLATIONS v AMAZON.COM, INC. ET AL
PLACE OF HEARING:
Toronto, Ontario
DATE OF HEARING:
December 5, 2024
ORDER and REASONs:
HORNE A.J.
DATED:
January 15, 2025
APPEARANCES:
Vincent M. de Grandpré
Shelby Morrison
For The Plaintiff /
Defendant by Counterclaim
Sangeetha Punniyamoorthy
Cristina Mihalceanu
For The Defendants /
plaintiffs by counterclaim
Chris Zelyas
For The proposed defendants
SOLICITORS OF RECORD:
Bennett Jones LLP
Barristers and Solicitors
Toronto, Ontario
FOR THE PLAINTIFF /
DEFENDANT BY COUNTERCLAIM
DLA Piper (Canada) LLP
Barristers and Solicitors
Toronto, Ontario
FOR THE DEFENDANTS /
PLAINTIFFS BY COUNTERCLAIM
Dentons Canada LLP
Barristers and Solicitors
Edmonton, Alberta
For The proposed defendants